Fashioning an exit

With rents up, sales down, many shops quitting Newbury St.

They waited years to score coveted digs on Newbury Street. Now they are disappearing literally overnight.

Faced with a decline in sales and a rise in already exorbitant rents, boutiques, galleries, and even chain stores are shuttering shops up and downwhat is considered Boston's most desired retail address. The exodus of exclusive merchants from the shopping district has proceeded in a steady drumbeat of sudden departures.

Employees at clothier Tess & Carlos, at 141A Newbury St., carried out boxes late one night earlier this month and never returned. A few days ago, shoe seller Rockport at 83 Newbury St. closed its doors.

Kidder Smith Gallery, at 131 Newbury St., posted a letter dated Jan. 23 on its now empty store: "Unfortunately, we were unable to come to terms with the new owners on a mutually acceptable agreement on our gallery, so we are officially in transition."

Comptoir de Famille, a vintage French home furnishings boutique at 127 Newbury St., will close today, blaming it on a new landlord who raised the monthly rent from $7,000 to $12,000. Next door neighbor Maha Barsom, a blouse designer, is likely to leave next month for the same reason. "People just disappear," said Ella Akinci, a manager at Comptoir de Famille. "It's scary."

The rash of recent closures follows one of the worst holiday seasons in decades as consumer spending slowed significantly. Retailers across the country are slashing expenses and shuttering stores. But to retail analysts and local merchants it is shocking to see such a rapid pace of departures from a prime location such as Newbury Street. In just one four-block stretch, there are nowmore than 18 vacancies.

Whittard of Chelsea, a coffee and tea shop at 170 Newbury St., has vanished. The Gap left a gaping hole last summer when it closed its massive store at the corner of Newbury and Exeter streets. Nearby, signs advertising available retail space are plastered in the windows where clothing boutique Stil left late last year for The Shops at Prudential Center. In recent weeks, Sugar Heaven abruptly abandoned its sweet shop at 218 Newbury St., and clothier Whim withdrew from its 253 Newbury St. space. Upscale pizzeria Croma at 269 Newbury St. is up for sale. The doors are locked, and the phone disconnected at eco-friendly gift store Fiddlehead, located at 292 Newbury St.

Some merchants are just taking time off.

Louis Boston shut down this past week with a letter on its front door proclaiming, "It's a good time to take a break." The upscale clothing emporium is planning to vacate its statelybuilding on the corner of Newbury and Berkeley streets when its lease expires next year.

It's a reversal of fortune for this Back Bay district, which has long been a retailer's dream: an eight-block stretch from Arlington Street to Massachusetts Avenue that attracts office workers from nearby towers, college students from local campuses, and tourists charmed by row after row of boutiques in brownstones.

In recent years, shops that line Newbury Street have witnessed dramatic increases in rent as chain stores with deep pockets, such as H&M and Victoria's Secret, moved into the neighborhood. It's not unusual for landlords to charge up to $200 per square foot in many of the cramped shops.

And the once hot real estate market has also exacerbated the problem, as many buildings were sold to new owners, some of whom now depend on sky-high rents to pay off enormous mortgages. The result: tenants, struggling with sluggish sales, can no longer afford the rents.

"People are having a hard time. There's no doubt about that," said Michele Messino, of Sterling Real Estate in Boston and treasurer of the , a nonprofit organization representing businesses on the street.

Some landlords are starting to reduce rentsbut more with tenants seeking office space rather than retail. "Before, there was no possibility of negotiating," said Messino. "If you didn't want to pay it, someone else would."

Kimco Realty, the landlord for Comptoir de Famille at 127-129 Newbury St., declined to comment on rent increases.

Newbury Street is still attracting new merchants, including Nespresso, an espresso machine seller that opened a few weeks ago, and clothing store Oak, which is moving next month from Gloucester Street. Haute designers, from Burberry to Marc Jacobs to Valentino, still have a presence.

But the flurry of January closings will further drive up the downtown vacancy rate. Already, a preliminary survey, which includes the Back Bay, Financial District, Downtown Crossing, and other neighborhoods, showed the retail vacancy rate had jumped to 8.1 percent in December 2008 compared with 6.1 percent in the previous year, according to Robert F. Sheehan, vice president of research at KeyPoint Partners LLC in Burlington.

"It's really surprising to see all these shops closed," said Aimee Mone, 41, as she walked down Newbury Street with her mother on Thursday. "The street was just saturated with stores. Now, it's hard to even find a place open for lunch."

The growing number of empty storefronts is worrying Michael Selletto, who has run the Fairy Shop, known for its gnome statues, fairies, and unicorns, on Newbury Street for 15 years. Last summer, Selletto's landlord asked the Fairy Shop to move down the street to fill a spot vacated by a maternity store. With his lease up in June, Selletto is having second thoughts about how much longer he can make it here.

"It's been getting slower and slower. There's going to be a lot more fallout, a lot of people going out of business, more than ever before," Selletto said. "There's very little room for error on this street these days if you want to survive."